a man in a suit and tie leaning with his head against the wall because he is facing a lay off

Debt Help Edmonton: Tips for Financially Surviving A Layoff

The thought of being laid off is a frightening one. Even a temporary layoff can have disastrous financial repercussions, particularly if you did not know the layoff was coming.

You need a plan in place to ensure that you are able to finance your life until you secure another job. If you have recently been laid off, are concerned that you may be let go from work, or simply want to be prepared for any eventuality, here are tips for financial survival from a Licensed Insolvency Trustee who serves the Edmonton area including Sherwood Park, Fort Saskatchewan, St. Albert, Spruce Grove, Stony Plain, Leduc, Hinton and Edson.


Plan to cover layoff or job loss by having an emergency fund

The best way to survive a layoff is to have an emergency fund in place to tide you over during the time it takes to find new work. Ideally, the amount in your emergency fund to cover job loss should be three to six months’ worth of your baseline budget. To determine your baseline budget, calculate the minimum amount of money you need each month to cover your basic costs (for example, housing, utilities, food, car payments, and credit card payments). It is also ideal to address any debt issues before a layoff, while you have a steady paycheck coming in. Contact the Edmonton debt counsellors at Fox-Miles & Associates Inc. Licensed Insolvency Trustee at 780-444-3939 to discuss options for clearing up debt and creating a plan to protect yourself financially.


If you suspect layoff is coming, take control of spending and debt

There may be signs from your employer that put you on notice that a layoff is coming. Don’t ignore those signs. Be proactive by tightening up on your spending and reducing your monthly expenses, then put the amounts you save in an account to buffer wage loss in the event that the layoff does happen. If the layoff does not in fact happen, the savings account can then become your emergency fund that will be there for you to minimize the impact of any future income interruptions (for example, due to illness).


It is also highly recommended that you consider dealing with any debt at this point. If you have a plan for managing your debts, they’ll be less likely to sink you if you do lose your job. For example, debt consolidation is an option to explore. Debt consolidation is the process of acquiring one loan to repay debts to a number of creditors at once, which will simplify your finances and may result in lower interest payments.


Alternatively, a consumer proposal may be best for you. Essentially, a consumer proposal is a process through which you and your creditors come to an agreement that arranges for partial payments of debts you owe pursuant to a set payment schedule. If you are considering debt consolidation or submitting a consumer proposal, contact us today to discuss the pros and cons of these debt management options and to get advice on which is best for you.

 

If you have already been laid off, it is not too late to take control of your finances

Whether you had an emergency plan in place or not, if you get laid off there are a few things you should do right away. Stop spending on anything non-essential (for example, restaurant meals and nights out) and reduce your expenses to the greatest extent possible (for example, look into switching to a less expensive phone plan or cutting your cable subscription). Prioritize your bills and payments including your mortgage or rent, utilities, insurance, lines of credit, and credit cards, and consider letting your bank and creditors know of your financial situation before you miss a payment. Look into the implications of using any savings you have (for example, money in an RRSP or Tax-Free Savings Account) to keep you afloat during your period of unemployment. And of course, at this point more than ever – do not wait to get help with your debt, which will almost certainly increase after a layoff. A bankruptcy trustee can help you come up with a plan to manage debt effectively while you are unemployed. 


Get Relief from Financial Distress. Speak with a Debt Counsellor in Edmonton.

If you have been laid off or suspect a layoff is coming, the Edmonton debt counsellors at Fox-Miles & Associates Inc. Licensed Insolvency Trustee are here to help you. We specialize in relieving financial distress by providing helpful financial advice from compassionate, qualified credit counsellors. Contact our offices today to schedule your free consultation to talk about the ways we can help.

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